The ASX200 bounced almost +1.3% overnight as the mining stocks enjoyed a strong rebound which helped the Materials Sector rally over +3.5%. The local market yet again finds itself only 3% below its all-time high although most subscribers would agree it doesn’t feel that strong but we cannot argue with the numbers, at MM we still believe “the path of most pain” for underweight investors is a pop to new highs but after trading sideways for more than 12-months it feels a rash call to say it will happen in coming weeks, especially as the banks are starting to feel tired into May.
A week is proving to be a very long time in today’s market, last week the ASX200 tested its all-time high for a second time in 2022 and then yesterday morning we found ourselves 5% lower. The pullback has largely been driven by a plunge in the previously “hot” Resources Sector as China threatens to choke the global economy with further COVID lockdowns, over just 6 trading sessions heavyweight BHP Group has fallen 16%. While MM believes the sector is likely to attract some buying after its savage rerating we remain conscious that investors were positioned the most overweight ever towards the commodity sector which by definition poses some clear washout risks – time will tell if we’ve just witnessed enough of a sell-off to rebalance the markets positioning towards the sector however it seems a strong possibility.
The ASX200 tumbled 2% yesterday courtesy of the combination of gathering downside momentum in global equities and China’s deteriorating COVID picture which is seriously threatening to derail global growth as lockdowns loom across the world’s 2nd largest economy. China is following the rest of the world’s approach to COVID elimination only more than a year behind schedule, Xi Jinping et al are now considering locking down Beijing in an effort to follow their zero-tolerance policy towards the virus – good luck with that! The “million-dollar question” is how far will China go to fight COVID...
The last 2 sessions in the US have seen major volatility with an almost 1000-point drop by the Dow on Friday followed up overnight by an almost 500-point morning dip before stocks reversed higher led by the embattled tech names. With the exception of growth, and especially tech stocks, equities have been holding up extremely well in the face of adversity over the last 6-months but COVID potentially bringing China’s economic growth to a grinding halt is both challenging the macro backdrop and causing weakness across many sectors of the market:
The local market continues to knock on the door of new all-time highs which I’m sure amazes many subscribers and even for bulls like MM its impressive when we consider the huge macro headwinds that have been thrown at equities through the early months of 2022:
The ASX200 got within 8 points of all-time highs yesterday morning however by 4.10pm the market was 63pts off the milestone that MM has been calling for months. Not even a spectacular $20bn private equity bid for hospital operator Ramsay Healthcare (RHC) was enough to offset the profit-taking that crept into the dominant banks and resources throughout the session. Overall, a weak day with the market feeling a touch tired having already rallied +6.39% in March & is now up ~1% in April.
Today I turn 40, I’m not normally big into birthdays however they say this one is meaningful, a time for reflection, to focus on what comes next. For me, hopefully, more of the same with a few more camping holidays, a bit more time with the kids, and I also feel like I need some adventures, things that offer a challenge both physically and mentally and that’s going to be a priority over the coming years. For Market Matters and our wider investment management business, there are some really exciting developments about to happen. Our vision for Market Matters has always been to create a great digital advice platform...
Firstly, I hope you all had a great Easter break, a beautiful 4 days in Sydney where the sun was certainly appreciated. The ASX 200 added +0.61% for the shortened week with Gold & Travel-related stocks populating the leader board. We’re now 19 days into the market’s 2nd strongest month of the year with a gain of just 0.32% to speak of. The ‘old world’ is smashing the new with Utilities up 5.44% while the Information Technology sector languishes, down another 4.01% for the period. Bond yields the major influence on respective sector performance however as US quarterly reporting season heats up it’s important to remember MM’s preferred path for the coming period.
Since hitting a high of 7573 on the 5th of April, the ASX200 has drifted lower as it consolidates the gains achieved in the best March since 2009. The patience of the bulls is being tested however in MM’s view it remains just a matter of time before new highs are achieved for local stocks. Bond yields had a rest yesterday which relieved some pressure on sectors that cower at their ongoing advance while the resources & energy stocks continued to enjoy strength in their underlying commodity prices.
The ASX200 disappointingly reversed some early optimism yesterday to close down 0.42% however there was a lack of interest in the market shown through light volumes ahead of the Easter break. Despite this continued consolidation, MM’s view is unchanged into the end of April / early May:
A week is proving to be a very long time in today’s market, last week the ASX200 tested its all-time high for a second time in 2022 and then yesterday morning we found ourselves 5% lower. The pullback has largely been driven by a plunge in the previously “hot” Resources Sector as China threatens to choke the global economy with further COVID lockdowns, over just 6 trading sessions heavyweight BHP Group has fallen 16%. While MM believes the sector is likely to attract some buying after its savage rerating we remain conscious that investors were positioned the most overweight ever towards the commodity sector which by definition poses some clear washout risks – time will tell if we’ve just witnessed enough of a sell-off to rebalance the markets positioning towards the sector however it seems a strong possibility.
The ASX200 tumbled 2% yesterday courtesy of the combination of gathering downside momentum in global equities and China’s deteriorating COVID picture which is seriously threatening to derail global growth as lockdowns loom across the world’s 2nd largest economy. China is following the rest of the world’s approach to COVID elimination only more than a year behind schedule, Xi Jinping et al are now considering locking down Beijing in an effort to follow their zero-tolerance policy towards the virus – good luck with that! The “million-dollar question” is how far will China go to fight COVID...
The last 2 sessions in the US have seen major volatility with an almost 1000-point drop by the Dow on Friday followed up overnight by an almost 500-point morning dip before stocks reversed higher led by the embattled tech names. With the exception of growth, and especially tech stocks, equities have been holding up extremely well in the face of adversity over the last 6-months but COVID potentially bringing China’s economic growth to a grinding halt is both challenging the macro backdrop and causing weakness across many sectors of the market:
The local market continues to knock on the door of new all-time highs which I’m sure amazes many subscribers and even for bulls like MM its impressive when we consider the huge macro headwinds that have been thrown at equities through the early months of 2022:
The ASX200 got within 8 points of all-time highs yesterday morning however by 4.10pm the market was 63pts off the milestone that MM has been calling for months. Not even a spectacular $20bn private equity bid for hospital operator Ramsay Healthcare (RHC) was enough to offset the profit-taking that crept into the dominant banks and resources throughout the session. Overall, a weak day with the market feeling a touch tired having already rallied +6.39% in March & is now up ~1% in April.
Today I turn 40, I’m not normally big into birthdays however they say this one is meaningful, a time for reflection, to focus on what comes next. For me, hopefully, more of the same with a few more camping holidays, a bit more time with the kids, and I also feel like I need some adventures, things that offer a challenge both physically and mentally and that’s going to be a priority over the coming years. For Market Matters and our wider investment management business, there are some really exciting developments about to happen. Our vision for Market Matters has always been to create a great digital advice platform...
Firstly, I hope you all had a great Easter break, a beautiful 4 days in Sydney where the sun was certainly appreciated. The ASX 200 added +0.61% for the shortened week with Gold & Travel-related stocks populating the leader board. We’re now 19 days into the market’s 2nd strongest month of the year with a gain of just 0.32% to speak of. The ‘old world’ is smashing the new with Utilities up 5.44% while the Information Technology sector languishes, down another 4.01% for the period. Bond yields the major influence on respective sector performance however as US quarterly reporting season heats up it’s important to remember MM’s preferred path for the coming period.
Since hitting a high of 7573 on the 5th of April, the ASX200 has drifted lower as it consolidates the gains achieved in the best March since 2009. The patience of the bulls is being tested however in MM’s view it remains just a matter of time before new highs are achieved for local stocks. Bond yields had a rest yesterday which relieved some pressure on sectors that cower at their ongoing advance while the resources & energy stocks continued to enjoy strength in their underlying commodity prices.
The ASX200 disappointingly reversed some early optimism yesterday to close down 0.42% however there was a lack of interest in the market shown through light volumes ahead of the Easter break. Despite this continued consolidation, MM’s view is unchanged into the end of April / early May:
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